Apple Destroys Estimates, Delivers Yet Another Blockbuster Quarter

Apple’s quarterly financial successes are so expected these days, it’s hard to be surprised anymore. But thanks to eager buyers in China, even the company’s behind-the-times iPhone 4S continues to sell at a record run rate, delivering yet another blockbuster quarter for the consumer electronics firm.

Apple reported net income of $11.62 billion for the quarter ending March 31, on revenues of $39.19 billion.

The company sold 35.1 million iPhones in the quarter, reflecting the fact that the new iPhone 4S was launched in China, the world’s biggest smartphone market, in the quarter. One has to think that iPhone 4S sales have leveled off nicely in other parts of the world—as evidenced by sales reports from US-based wireless carriers like AT&T and Verizon—given its lack of compatibility with modern 4G wireless networks and other features. But Apple destroyed all estimates for iPhone sales, regardless, and nearly doubled its unit sales from the same quarter one year ago.

Apple sold 11.8 million iPads during the quarter, and the company reported that it has now sold 67 million iPads since the first-generation version arrived in 2010. Apple CEO Tim Cook boasted that it took the company “24 years” to ship that many Mac computers, but that’s a bit of a skewed comparison. To put the iPad in perspective, PC makers have shipped more than 700 million computers since the original iPad debuted, so iPad sales still represent less than 10 percent of PC sales.

Speaking of Macs, Apple sold 4 million of them in the quarter. The company also sold 7.7 million iPods in its one shrinking (if still dominant) market.

Apple says it added $14 billion in operations-based cash flow in the quarter, driving its total cash and cash-like assets to a heady $110 billion.

During a conference call with press and analysts, Mr. Cook finally addressed some pressing competitive pressures that are now facing the company.

Responding to a question about Samsung, which is involved in a bewildering series of patent-based legal battles with Apple, Cook said he’s considering settling with the firm. "I've always hated litigation, and I continue to hate it," he noted. “I’d rather settle than battle.”

As for Windows 8, Microsoft’s coming OS for computers, laptops, and tablets, Cook said that it was a “defensive move” and that Apple would never make the compromises Microsoft is making. "You can converge a toaster and a refrigerator, but those things are probably not going to be pleasing to the user,” he said. “We’re not going to that party.” In other words, Apple will continue to keep its iPhone, iPad, and Mac products separate.